Musk is charged with creating a pyramid scheme to promote the Dogecoin cryptocurrency.
Musk, his electric vehicle company Tesla Inc., his space tourism company SpaceX, his tunnel building company Boring Co., and other parties are mentioned in the updated complaint that was filed on Tuesday evening in Manhattan federal court.
According to the lawsuit, they purposely increased Dogecoin’s value.
Dogecoin experienced a two-year increase of more than 36,000% followed by a decline.
Despite knowing all along that the currency had no inherent worth and that its value “depended purely on marketing,” the defendants “profited tens of billions of dollars” as a result at the expense of other Dogecoin investors, the complaint claimed.
Requests for comment on Wednesday were not immediately answered by Tesla, SpaceX, or Boring. In 2020, Tesla closed its public relations division.
In June, the initial lawsuit was submitted.
The updated complaint claimed that shortly after, Musk tweeted that he would “keep supporting Dogecoin” and claimed in an interview that “those that work around the factory at SpaceX or Tesla” urged him for that support.
The $258 billion lawsuit that accuses Elon Musk of running a pyramid scheme by endorsing the Dogecoin cryptocurrency has been expanded.
According to the updated complaint, Musk and his companies purposefully drove the price of Dogecoin up by more than 36,000% over a two-year period. The case was submitted to a federal court in Manhattan on Tuesday night. Musk’s companies SpaceX (his spaceflight company), Boring (his tunnel construction company), and Tesla are all referenced in the case (his electric car manufacturing company). Then, using the same strategies he had used to raise Dogecoin’s value, Musk caused it to crash.
According to the lawsuit, Musk was able to collect profits worth tens of billions of dollars as a result of the fall at the expense of other Dogecoin investors. Additionally, the plaintiffs claimed that Musk was aware from the beginning that Dogecoin had no inherent value and that its only worth came from marketing. But he made use of his clout on social media sites to advertise Dogecoin as a reliable investment.
None of Musk’s businesses included in the case have released any public remarks or responded to requests for comments from the media. It’s important to remember that Tesla shut down its media relations division two years ago. Three months ago, a Dogecoin investor filed the initial complaint, alleging that Musk was operating a Dogecoin pyramid scam.
Additional charges against Musk
In the new case, the complainants further stated that Musk stated in an interview that his SpaceX and Tesla employees had begged him to continue backing the disputed coin. Musk announced on Twitter shortly after the amended complaint that he would keep supporting Dogecoin. A second defendant in the case is the Dogecoin foundation in the amended lawsuit.
The foundation describes itself as a nonprofit that provides governance and support for Dogecoin. However, neither the foundation nor any official statement about the situation has been in response to inquiries for comment. Damages totaling $258 billion are three times greater than the expected decline in Dogecoin’s value between May 2021 and now.
Musk made an appearance on the weekend update of NBC’s Saturday Night Live sometime in May 2021. The world’s richest man, Elon Musk, described Dogecoin as “a scam” in the interview. According to our data, Dogecoin is presently trading at $0.06. That represents a significant decrease from its $0.74 pricing in May 2021.
